“Their suspicions aroused, however, Samara officials launched an investigation, which disclosed that Walmart [was] selling the knockoffs of Samara’s outfits.” —Justice Scalia 

Facts: Samara Brothers, Inc. (Samara), is a designer and manufacturer of children’s clothing. Samara sold its clothing to retailers, which in turn sold the clothes to consumers. Wal-Mart Stores, Inc. (Walmart), operates a large chain of budget warehouse stores that sell thousands of items at very low prices. Walmart contacted one of its suppliers, Judy-Philippine, Inc. (JPI), about the possibility of making a line of children’s clothes just like Samara’s successful line. Walmart sent photographs of Samara’s children’s clothes to JPI (with the name “Samara” readily discernible on the labels of the garments) and directed JPI to produce children’s clothes exactly like those in the photographs. JPI produced a line of children’s clothes for Walmart that copied the designs, colors, and patterns of Samara’s clothing. Walmart then sold this line of children’s clothing in its stores. Samara discovered that Walmart was selling the knockoff clothes at a price that was lower than Samara’s retailers were paying Samara for its clothes. After sending unsuccessful cease-and-desist letters to Walmart, Samara sued Walmart, alleging that Walmart stole Samara’s trade dress in violation of Section 43(a) of the Lanham Act. The U.S. district court held in favor of Samara and awarded damages. The U.S. court of appeals affirmed the award to Samara. Walmart appealed to the U.S. Supreme Court. 

Issue Must a product’s design have acquired a secondary meaning before it is protected as trade dress? 

Language of the U.S. Supreme Court The Lanham Act, in Section 43(a), requires that a producer show that the allegedly infringing feature is likely to cause confusion with the product for which protection is sought. In an action for infringement of unregistered trade dress a product’s design is protectable only upon a showing of secondary meaning. 

Decision: The Supreme Court reversed the decision of the U.S. court of appeals and remanded the case for further proceedings consistent with its opinion. 

Ethics Questions: Did Walmart act illegally in this case? Was Walmart’s conduct unethical?